Cash ISA maturing - new ISA, or not?

Aylesbury_Duck

I have a one year fixed rate cash ISA with Leeds (3.85%) that matures in two weeks' time.  They've written asking for my instructions at maturity.  If I do nothing, it automatically turns into an ISA Saver at just 2.45%, whereas I have options to move it to other Leeds cash ISAs with rates of c.5%.  In this tax year (May) I have already opened and subscribed to a Marcus cash ISA.  Does moving the maturing Leeds ISA to anything other than the default ISA Saver constitute a new ISA, and is therefore not permitted?  I have c.£30k in the account, so I'd rather not have it dawdle about at 2.45% until April when I can do something better with it.  I have no intention to add to it in this tax year in any case.

frugalmacdugal

Hi,

on maturity you can transfer to new Leeds ISA or a new provider, you must initiate transfer through the new provider and they do the legwork.

Marcus do not allow transfers in.

Aylesbury_Duck

frugalmacdugal said:

Hi,

on maturity you can transfer to new Leeds ISA or a new provider, you must initiate transfer through the new provider and they do the legwork.

Marcus do not allow transfers in.

Thanks.  My intention is for it to sit in a Leeds product until April, I'll then review.  Just need to understand if moving to a new Leeds product on maturity counts as a new ISA or not.

Albermarle

Aylesbury_Duck said:

frugalmacdugal said:

Hi,

on maturity you can transfer to new Leeds ISA or a new provider, you must initiate transfer through the new provider and they do the legwork.

Marcus do not allow transfers in.

Thanks.  My intention is for it to sit in a Leeds product until April, I'll then review.  Just need to understand if moving to a new Leeds product on maturity counts as a new ISA or not.

No it will not. If you read through the forum, you will lots of threads about ISA transfers, which will be a useful way to get up to speed in this area.

frugalmacdugal

Hi,

have a look at MSE best ISAs, and scroll down to Need to know number 1 re transfers.

refluxer

Aylesbury_Duck said:

Thanks.  My intention is for it to sit in a Leeds product until April, I'll then review.  Just need to understand if moving to a new Leeds product on maturity counts as a new ISA or not.

There is no restriction on the number of cash ISAs you can open during the tax year - the only restriction is that you can only pay new subscriptions from the current tax year into one cash ISA at any one time.

In your case, this means that you're currently only restricted with what you can do with the funds in your Marcus ISA. As your maturing Leeds ISA contains funds from previous tax years, then there is no need to wait until April to decide what to do with it - you'll be free to transfer it to a new ISA once it matures in a few weeks time, whether that is with the Leeds BS or elsewhere.

If you're considering another fixed rate cash ISA, then it's worth noting that rates have been dropping on an almost-daily basis at the moment so if that trend continues, it's possible that fixed rates on offer next April will be considerably lower than they are now. There's a lot that can happen in-between now and then though, so there are no guarantees either way of course. If you do want to hold off on deciding on a fix for whatever reason, then make sure you at least transfer to an alternative easy access cash ISA as you can get over twice the rate elsewhere as you'll get in the Leeds ISA Saver. Even Leeds themselves have a Limited Issue Online Access ISA that pays twice as much, but just read the T&Cs carefully to ensure that it meets your needs because, despite being an easy access ISA, it appears to have a maturity date, for some reason.

Note that, when opening a new cash ISA, you'll have to sign the usual ISA declaration to say that you will have "not subscribed and will not subscribe to another cash ISA in the same tax year that I subscribe to this Cash ISA" but 'subscribe' in this context only refers to paying in subscriptions from the current tax year and therefore doesn't apply to a transfer of an ISA containing contributions from a previous tax year, meaning you are fine to sign it for such a transfer. I just thought this was worth mentioning as this often gets questioned and causes people to pause their application. Once the new ISA is open then, as mentioned above, you need to request the transfer via whatever official transfer process the new bank or building society provides.

jimjames

Aylesbury_Duck said:

frugalmacdugal said:

Hi,

on maturity you can transfer to new Leeds ISA or a new provider, you must initiate transfer through the new provider and they do the legwork.

Marcus do not allow transfers in.

Thanks.  My intention is for it to sit in a Leeds product until April, I'll then review.  Just need to understand if moving to a new Leeds product on maturity counts as a new ISA or not.

Why wait till April? You can get 5% + on the ISA with instant access or another fixed rate near 6%

Aylesbury_Duck

jimjames said:

Aylesbury_Duck said:

frugalmacdugal said:

Hi,

on maturity you can transfer to new Leeds ISA or a new provider, you must initiate transfer through the new provider and they do the legwork.

Marcus do not allow transfers in.

Thanks.  My intention is for it to sit in a Leeds product until April, I'll then review.  Just need to understand if moving to a new Leeds product on maturity counts as a new ISA or not.

Why wait till April? You can get 5% + on the ISA with instant access or another fixed rate near 6%

Initially I was unsure about the 'legality' of opening another ISA in this tax year, hence the wait until April, but that's been cleared up.  What I meant was that I'll let it sit in the best instant access Leeds ISA I can get (which seems to be 4.95%) and re-assess in due course.  I've got a couple of big-ticket expenses to cover in the next few months, and I may use some of the funds for that, or use funds from a bond I have maturing and then move my cash ISA into my iWeb S&S ISA.

GrubbyGirl_2

Leeds cash ISA at 5% is better than Marcus cash ISA at 4.75% so why move it?

VXman

GrubbyGirl_2 said:

Leeds cash ISA at 5% is better than Marcus cash ISA at 4.75% so why move it?

That was never the question. He needs to move it as it is maturing and will end up in a Leeds (standard saver)  ISA at 2.45%

Aylesbury_Duck

Thanks all.  I have instructed Leeds to move it to their 4.95% instant access ISA upon maturity.  Once I know what funds I'll need from it (if anything), I'll look at fixed rate options and/or transfer into my iWeb S&S ISA.